The audited financial statements, management discussion and analysis and annual information form for the year ended December 31, 2025 will be available on the System for Electronic Document Analysis and Retrieval Plus ("SEDAR+") at www.sedarplus.ca, on EDGAR at www.sec.gov/edgar.shtml, and on Vermilion's website at www.vermilionenergy.com.
Highlights
Year End 2025 Results
Generated $1,010 million ($6.58/basic share)(2) of fund flows from operations ("FFO")(1) and $375 million of free cash flow ("FCF")(6), fully funding $635 million of exploration and development ("E&D") capital expenditures(3) while strengthening the balance sheet and returning cash to shareholders.
Reduced net debt(7) by more than $700 million since Q1 2025, ending the year at $1.34 billion and achieving a net debt to four quarter trailing FFO(8) ratio of 1.4x, with debt levels well below any relevant financial covenants.
Returned $116 million to shareholders through dividends and share buybacks, including $80 million in dividends and the repurchase and cancellation of 3.1 million shares under the NCIB.
Realized an average natural gas price of $6.01/mcf after hedging in 2025, more than three times the AECO benchmark, reflecting structural exposure to premium international gas markets and portfolio diversification.
Reported a net loss of $654 million ($4.25/basic share) driven by discontinued operations related to the sale of Saskatchewan and U.S. assets, and non-cash, price-related impairments on mature legacy assets in Australia, France, and Ireland, with no impact on 2025 FFO, liquidity or ongoing operations.
Record production of 119,919 boe/d(10) (65% natural gas), representing 46% per share growth year over year. Production comprised of 90,062 boe/d(10) from North American assets and 29,857 boe/d(10) from International assets.
Year-end total proved plus probable ("2P") reserves increased by 36% year over year to 592 mmboe(13), reflecting a reserve life index of 14 years and a reserves replacement of over 450%.
Proved developed producing ("PDP") and 2P finding, development and acquisition ("FD&A") costs(14), including changes in future development costs ("FDC") of $14.91/boe and $7.71/boe, respectively, resulting in a FD&A Operating Recycle Ratio(15) of 1.8 times and 3.5 times, respectively.
Before-tax net present value ("NPV") of 2P reserves, discounted at 10%, of $4.8 billion(13) or $23 per share(13) after deducting year-end net debt. The 2P NPV includes the development of 23% of Vermilion's internally identified inventory in the Deep Basin and Montney.
Q4 2025 Results
Generated $241 million ($1.57/basic share)(2) of FFO(1) and $49 million of FCF(6), fully funding $192 million of E&D capital expenditures(3).
Vermilion reduced net debt by $42 million and returned $26 million to shareholders through dividends and share buybacks, comprising $20 million in dividends and the repurchase and cancellation of 0.6 million shares through the NCIB.
Realized an average natural gas price of $5.50/mcf after hedging in Q4 2025, more than twice the AECO benchmark, reflecting diversified market access.
Reported a net loss from continuing operations of $438 million ($2.86/basic share), driven by non-cash impairments on legacy assets with no impact on quarterly FFO or FCF.
Production averaged 121,308 boe/d(10) (69% natural gas), up 46% per share versus Q4 2024 with 91,171 boe/d(10) from North America and 30,137 boe/d(10) from International assets.
During the quarter, Vermilion brought online several top performing Deep Basin wells, including wells that were deferred to mid-Q4 2025 to maximize profitability. With these wells coming on production in the quarter, as well as previously shut-in wells being brought back online, production from continuing operations in Canada was over 5,000 boe/d higher than the prior quarter.
In the Montney, our Mica asset generated record production of over 16,000 boe/d in Q4 2025, while we spud the most recent pad and remained focused on continued improvement of both operating and drilling and completion costs.
In the Netherlands, successfully brought two (1.2 net) conventional natural gas wells on production and advanced permitting and preparatory work for additional drilling in 2026.
In Germany, advanced infrastructure construction for the Wisselshorst well, which remains on track for first production in mid-2026, while the Osterheide well delivered average production of approximately 10 mmcf/d, representing a 45% increase from Q3 2025.
Operationally, the fourth quarter of 2025 was reflective of our focus on continuous improvement. Unit operating costs in Canada benefitted from greater operational scale, high-quality assets and commitment to cost management to reach their lowest level in over a decade, which drove corporate unit operating costs of $11.86/boe, the lowest since 2020.
Outlook
Vermilion expects Q1 2026 production to average 122,000 to 124,000 boe/d (70% natural gas)(16), with full-year production of 118,000 to 122,000 boe/d (70% natural gas)(16) on E&D capital expenditures of $600 to $630 million.
Declared a quarterly cash dividend of $0.135 per common share, payable on March 31, 2026, to shareholders of record on March 13, 2026. As previously announced, this quarterly cash dividend represents a 4% increase over the prior dividend, and the fifth consecutive year of dividend increases.
($M except as indicated)
Q4 2025
Q3 2025
Q4 2024
2025
2024
Financial
Fund flows from operations (1)
240,734
253,810
262,698
1,010,251
1,205,783
Fund flows from operations ($/basic share) (2)
1.57
1.65
1.70
6.58
7.63
Fund flows from operations ($/diluted share) (2)
1.55
1.64
1.68
6.51
7.55
Net earnings (loss)
Net loss from continuing operations
(438,119)
(4,774)
(18,524)
(364,805)
(96,169)
Net earnings (loss) from discontinued operations
466
7,331
208
(288,796)
49,430
Net earnings (loss)
(437,653)
2,557
(18,316)
(653,601)
(46,739)
Net loss from continuing operations ($/basic share)
(2.86)
(0.03)
(0.12)
(2.37)
(0.61)
Net earnings (loss) from discontinued operations ($/basic share)
--
0.05
--
(1.88)
0.31
Net earnings (loss) ($/basic share)
(2.86)
0.02
(0.12)
(4.25)
(0.30)
Cash flows from operating activities
133,357
389,453
212,587
943,661
967,751
Cash flows used in (from) investing activities
109,062
(325,061)
154,672
1,238,736
634,868
Capital expenditures (3)
191,752
145,562
200,659
634,922
622,980
Acquisitions (4)
1,646
1,068
5,257
1,125,303
22,101
Dispositions (5)
--
483,525
--
483,525
--
Repurchase of shares
6,527
6,320
17,637
35,746
140,707
Cash dividends ($/share)
0.13
0.13
0.12
0.52
0.48
Dividends declared
19,895
19,947
18,521
79,907
75,327
Free cash flow (6)
48,982
108,248
62,039
375,329
582,803
Long-term debt
1,243,397
1,264,343
963,456
1,243,397
963,456
Net debt (7)
1,342,390
1,384,753
966,882
1,342,390
966,882
Net debt to four quarter trailing fund flows from operations (8)
1.4
1.4
0.8
1.4
0.8
Shares outstanding - basic ('000s)
152,950
153,434
154,344
152,950
154,344
Weighted average shares outstanding - diluted ('000s) (9)
155,183
154,921
156,184
153,863
158,068
Operational
Production (10)
Crude oil and condensate (bbls/d)
25,401
28,197
30,327
30,832
31,427
NGLs (bbls/d)
12,140
10,985
6,612
11,244
7,100
Natural gas (mmcf/d)
502.60
479.28
279.59
467.06
276.10
Total (boe/d)
121,308
119,062
83,536
119,919
84,543
Average realized prices
Crude oil and condensate ($/bbl)
83.21
91.93
100.06
89.98
104.29
NGLs ($/bbl)
21.17
22.99
29.38
24.69
30.61
Natural gas ($/mcf)
5.13
4.36
8.47
5.38
6.72
Average realized price ($/boe)
40.99
42.18
66.54
46.42
63.58
Production mix (% of production)
% priced with reference to AECO
54 %
52 %
33 %
50 %
32 %
% priced with reference to TTF and NBP
15 %
15 %
23 %
15 %
22 %
% priced with reference to WTI
21 %
23 %
29 %
25 %
31 %
% priced with reference to Dated Brent
10 %
10 %
15 %
10 %
15 %
Netbacks
Operating netback ($/boe) (11)
25.62
28.54
43.92
29.91
47.18
Fund flows from operations ($/boe) (12)
21.47
22.82
34.67
23.10
38.71
(1)
Fund flows from operations (FFO) is a total of segments and non-GAAP financial measure most directly comparable to net loss and is calculated as sales less royalties, transportation expense, operating expense, G&A expense, corporate income tax expense (recovery), PRRT expense, interest expense, equity based compensation settled in cash, realized (gain) loss on derivatives, realized foreign exchange (gain) loss, and realized other (income) expense. The measure is used by management to assess the contribution of each business unit to Vermilion's ability to generate income necessary to pay dividends, repay debt, fund asset retirement obligations, and make capital investments. FFO does not have a standardized meaning under IFRS® Accounting Standards and therefore may not be comparable to similar measures provided by other issuers. More information and a reconciliation to net earnings (loss), the most directly comparable primary financial statement measure, can be found in the "Non-GAAP and Other Specified Financial Measures" section of this document. Fund flows from continuing operations and fund flows from discontinued operations are calculated in the same manner as FFO and are most directly comparable to net earnings (loss) from continuing operations and net earnings (loss) discontinued operations, respectively.
(2)
Fund flows from operations per basic share and diluted share is calculated by dividing fund flows from operations (total of segments and non-GAAP financial measure) by the basic weighted average shares outstanding as defined under IFRS Accounting Standards. Fund flows from operations per diluted share is calculated by dividing fund flows from operations by the sum of basic weighted average shares outstanding and incremental shares issuable under the equity based compensation plans as determined using the treasury stock method. Management assesses fund flows from operations on a per share basis as we believe this provides a measure of our operating performance after taking into account the issuance and potential future issuance of Vermilion common shares. More information and a reconciliation to cash flows used in investing activities, the most directly comparable primary financial statement measure, can be found in the "Non-GAAP and Other Specified Financial Measures" section of this document. Fund flows from continuing operations per basic and diluted share and fund flows from discontinued operations per basic and diluted share are calculated in the same manner as FFO per basic and diluted share.
(3)
Capital expenditures is a non-GAAP financial measure most directly comparable to cash flows used in investing activities and is calculated as the sum of drilling and development costs and exploration and evaluation costs. Management considers capital expenditures to be a useful measure of our investment in our existing asset base. Capital expenditures does not have a standardized meaning under IFRS Accounting Standards and therefore may not be comparable to similar measures provided by other issuers. More information and a reconciliation to cash flows used in investing activities, the most directly comparable primary financial statement measure, can be found in the "Non-GAAP and Other Specified Financial Measures" section of this document. Capital expenditures is also referred to as E&D capital expenditures.
(4)
Acquisitions is a non-GAAP financial measure and is not a standardized financial measure under IFRS Accounting Standards and therefore may not be comparable to similar measures disclosed by other issuers. Acquisitions is calculated as the sum of acquisitions, net of cash acquired, acquisitions of securities and net acquired working capital (deficit). Management believes that including these components provides a useful measure of the economic investment associated with our acquisition activity and is most directly comparable to cash flows used in investing activities. More information and a reconciliation to acquisitions, net of cash acquired and acquisition of securities, the most directly comparable primary financial statement measure, can be found in the "Non-GAAP and Other Specified Financial Measures" section of this document.
(5)
Dispositions is a non-GAAP financial measure and is not a standardized financial measure under IFRS Accounting Standards and therefore may not be comparable to similar measures disclosed by other issuers. Dispositions is calculated as the sum of dispositions, and disposition of securities. Management believes that including these components provides a useful measure of the proceeds associated with our disposition activities and is most directly comparable to cash flows used in investing activities. More information and a reconciliation to dispositions and disposition of securities, the most directly comparable primary financial statement measures, can be found in the "Non-GAAP and Other Specified Financial Measures" section of this document.
(6)
Free cash flow (FCF) and excess free cash flow (EFCF) are non-GAAP financial measures most directly comparable to cash flows from operating activities. FCF is calculated as FFO less drilling and development costs and exploration and evaluation costs and EFCF is calculated as FCF less payments on lease obligations and asset retirement obligations settled. FCF is used by management to determine the funding available for investing and financing activities including payment of dividends, repayment of long-term debt, reallocation into existing business units and deployment into new ventures. EFCF is used by management to determine the funding available to return to shareholders after costs attributable to normal business operations. FCF and EFCF do not have standardized meanings under IFRS Accounting Standards and therefore may not be comparable to similar measures provided by other issuers. More information and a reconciliation to cash flows from operating activities, the most directly comparable primary financial statement measure, can be found in the "Non-GAAP and Other Specified Financial Measures" section of this document.
(7)
Net debt is a capital management measure in accordance with IAS 1 "Presentation of Financial Statements" that is most directly comparable to long-term debt and is calculated as long-term debt (excluding unrealized foreign exchange on swapped USD borrowings) plus adjusted working deficit (capital), a non-GAAP financial measure described in the "Non-GAAP and Other Specified Financial Measures" section of this document. Management considers this a helpful representation of Vermilion's net financing obligations after adjusting for the timing of working capital fluctuations. More information and a reconciliation to long-term debt, the most directly comparable primary financial statement measure, can be found in the "Non-GAAP and Other Specified Financial Measures" section of this document.
(8)
Net debt to four quarter trailing fund flows from operations is a non-GAAP ratio and is not a standardized financial measure under IFRS Accounting Standards and therefore may not be comparable to similar measures disclosed by other issuers. Net debt to four quarter FFO is calculated as net debt divided by FFO from the preceding four quarters. Management uses this measure to assess the Company's ability to repay debt. More information can be found in the "Non-GAAP and Other Specified Financial Measures" section of this document.
Subsequent to February 26, 2025, net debt to four quarter trailing fund flows from operations is calculated inclusive of Westbrick Energy's pre-acquisition four quarter trailing fund flows from operations, as if the acquisition of Westbrick Energy occurred at the beginning of the four quarter trailing period, and exclusive of the four quarter trailing fund flows from discontinued operations to reflect the Company's ability to repay debt on a pro forma basis.
(9)
Diluted shares outstanding represents the sum of shares outstanding at the period end plus outstanding awards under the Long-term Incentive Plan, based on current estimates of future performance factors and forfeiture rates.
(10)
Please refer to Supplemental Table 4 "Production" of the accompanying Management's Discussion and Analysis for disclosure by product type.
(11)
Operating netback is a non-GAAP financial measure that is not standardized under IFRS Accounting Standards and may not be comparable to similar measures disclosed by other issuers. Operating netback is most directly comparable to net (loss) earnings and is calculated as sales less royalties, operating expense, transportation expense, PRRT expense, and realized hedging (gain) loss, and when presented on a per unit basis is a non-GAAP ratio. Management assesses operating netback as a measure of the profitability and efficiency of our field operations. More information and a reconciliation to net (loss) earnings, the most directly comparable primary financial statement measure, can be found in the "Non-GAAP and Other Specified Financial Measures" section of this document.
(12)
Fund flows from operations per boe is a non-GAAP ratio that is not standardized under IFRS Accounting Standards and may not be comparable to similar measures disclosed by other issuers. FFO per boe is calculated as FFO divided by boe production. FFO per boe is used by management to assess the profitability of Vermilion's business units and Vermilion as a whole. More information can be found in the "Non-GAAP and Other Specified Financial Measures" section of this document. Fund flows from continuing operations per boe and fund flows from discontinued operations per boe are calculated in the same manner as FFO per boe.
(13)
Estimated gross proved, developed and producing, total proved, and total proved plus probable reserves as evaluated by McDaniel & Associates Consultants Ltd. ("McDaniel") in a report dated March 3, 2026 with an effective date of December 31, 2025 (the "McDaniel Reserves Report"). See Vermilion's annual information form for the year ended December 31, 2025 for additional information, including reserve pricing assumptions. Per share metrics calculated using basic shares outstanding at December 31, 2025.
(14)
F&D (finding and development) and FD&A (finding, development and acquisition) costs are calculated by dividing the applicable capital expenditures for the period, including the change in undiscounted FDC (future development capital), by the change in the reserves, incorporating revisions and production, for the same period. More information can be found in the "Non-GAAP Financial Measures and Other Specified Financial Measures" section of this document.
(15)
Operating Recycle Ratio is a non-GAAP ratio that is calculated by dividing the Operating Netback, excluding PRRT and realized hedging gains and losses, by the cost of adding reserves (F&D and FD&A cost). For the purposes of calculating 2025 Operating Recycle Ratio, this netback number was $26.60. More information can be found in the "Non-GAAP Financial Measures and Other Specified Financial Measures" section of this document.
(16)
Based on Company estimates as at March 2, 2026.
Message to Shareholders
It was an impactful year for Vermilion, repositioning the Company as a Global Gas Producer with long-duration assets, improving profitability and growing free cash flow ("FCF") per share. Through the acquisition of Westbrick Energy Ltd. and the divestments of our Saskatchewan and United States businesses, our go-forward strategy is focused on our gas-weighted assets in Canada and Europe. Our portfolio is anchored by liquids–rich gas assets in the Deep Basin and Montney, complemented by premium-priced European gas assets in Germany, Ireland and the Netherlands. This exposure to global commodity prices remains a strategic advantage for Vermilion, as illustrated by our 2025 realized gas price, after hedging, of $6.01/mcf, which benefits from direct exposure to European gas prices. Europe is on track to exit the winter season with gas inventories well below the five-year average, and the requirement to refill storage ahead of the next winter season is expected to be positive to gas fundamentals.
Our repositioned global gas portfolio is characterized by higher production per share and a lower cost structure, the combination of which delivers growing FCF, all underpinned by high-quality, long-life assets. Through acquisitions and exploration, we have secured large in-place resource that provides decades of development opportunities. We continue ...
